Answers Archive

Dividends from US real Estate

The income earned by your and your husband’s US C-corporation is classified as foreign accrual property income (FAPI) for Canadian tax purposes. If the corporate income tax paid (Federal + State) in the US is less than 25%, then you both will have a net income inclusion for Canadian tax purposes in respect of the … Continue reading

Can we buy Primary residence with Corporation in Canada ?

You can purchase a home through a corporation. The arrangement is such that the corporation uses its cash retained earnings in combination with a bank mortgage (if required) to purchase a property. You then become a tenant and pay fair market value rent to the corporation. There is risk involved with his strategy, because the … Continue reading

Corporate taxes on dividends

I am assuming that all of the companies involved are Canadian corporations. In this case, your investment company can claim a tax deduction under section 112 of the Canadian income tax act for the dividends received. To do so, complete Schedule 3 of the T2 corporate tax return. In addition, if your investment company owns … Continue reading

can we transfer existing business to new holding company?

Yes, you can transfer an existing business to a newly incorporated holding company on a tax-free basis by implementing a Section 85 rollover. I need more information about your business and it’s existing set-up to answer your questions in more detail.

to send money to my son in canada

Your best option is to send money to your son as a gift. Your son will not have to pay tax on the gift received, and there is no upper limit on the amount of the gift that you can give him. A gift letter should be prepared and notarized. Consider making a wire-transfer to … Continue reading

is there any way to defer taxes on securities traded in Non-Registered Account?

No, you cannot defer capital gains on the sale of marketable securities held in a non-registered account.

T1135 required for cryptocurrency?

If the currencies are held on an exchange outside Canada, and the total cost amount is more than $100,000 at any time in the year, then form T1135 must be filed.

What are the tax implications of a Canadian parent company with a wholly owned U.S. Subsidiary holding/investing cash at U.s subsidiary level?

The following are the tax implications: The US C-corporation (subsidiary) will pay US federal income tax at a rate of 21%, plus applicable State Income Tax on its annual profits If the income earned is passive in nature, then there will be a small net income inclusion for the Canadian Parent Corporation in respect of the … Continue reading

Extracting cash from corp that sold its only property (real estate)

It’s too late to add your spouse and income-split with her. Other than repaying your shareholder debt, consider paying yourself a tax-free capital dividend (equal to one-half of the capital gain).

how to find undepreciated capital cost of rental property in brampton?

In your case, the UCC is equal to the purchase price + closing costs paid because you have not claimed any CCA to date.

Transfer of Prior non Capital loss

Your spouse can rollover assets / shares at their cost amount to you (automatic rollover). When you sell the assets / shares, you can claim the capital loss.

withholding Tax On Dividends Paid By A US Company To A Canadian Parent Company (FAPI) Part 3

Forms 1042, 1042-S and 1042-T must be filed by March 15 of the year following the calendar year in which the dividend was paid. The deadline for payment is 15 days following the month in which the dividend payment was made.

property gift from india

If the property belongs to your mother and she is the beneficial owner of the property, then the after-tax sales proceeds can be paid to you in Canada, and you will not have to pay tax on the amount received. Your mother will be responsible for paying any capital gains tax to the Indian Tax … Continue reading

Best tax savings options for high earning spouse.

Hi Anu, Here are some tax tips for a high-income earning spouse: 1. Contribute to a spousal RRSP. RRSP contributions are deductible, and upon retirement, your lower-income spouse will include the withdrawals in his/her income. 2. Maximize your TFSA contributions. Income earned in a TFSA is tax-free, and withdrawals are not taxable. 3. Make a … Continue reading

Cash withdrawal

First, repay any shareholder debt owing. This is tax-free and the repayment is recorded as a reduction of the shareholder debt. Second, pay a taxable dividend (other than eligible) to the shareholders to the extent the company has any retained earnings. A dividend is reported on a T5 slip and is treated as a reduction … Continue reading

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